Well it wasn’t quite a personal race car, but this Globe and Mail article (which declares “self-employment is one of the last great tax shelters”) examines the case of Keven Neilson, who tried to deduct money spent on sponsoring his own racecar.

The issues in a nutshell:

1. Were the costs personal or business in nature?

2. If the costs were for business, do they relate to the specific business in which you’re claiming the deduction?

3. Are the costs capital expenditures, or current expenses? (Capital expenditures aren’t deductible, except perhaps through capital cost allowance.)

4. Are the costs reasonable?

Mark Jeftovic has been a self-employed internet professional since 1994, currently he is the founder and president of easyDNS Technologies Inc., the DNS hosting company and domain registrar. His personal blog is at http://mark.jeftovic.net